The end of a marriage tends to affect the standard of living for each member of a former couple, as it costs more to maintain two separate households than one shared domicile. Spouses also have to cover divorce expenses, split their assets and negotiate ways to share responsibility for any children they may have together.
Even before people formally file the paperwork to begin the divorce process, they may want to start preparing for the major changes to their finances. The process of preparing for a divorce and planning for the future typically requires a thorough review of financial circumstances.
What financial records do people need to evaluate as they prepare for divorce?
Income records
Financial records related to household income help people evaluate their circumstances. They also help clarify what assets the spouses have acquired using marital income. Income tax statements and records from financial institutions typically include important details that help people better evaluate their finances as they prepare for divorce.
Information about marital debts
Credit cards, mortgages, vehicle loans and other financial obligations impact the household budget. Those financial responsibilities may also influence the division of marital property during the divorce process. Spouses often need to look carefully over the use of credit to determine which debts might be subject to division and which may belong separately to either spouse. Often, the date that people take on the debt is more important than the name on the account. Even a credit card in the name of one spouse can influence the marital estate and the property division process.
Records and valuations for marital resources
From vehicles and business to real property holdings, there are many valuable resources that the spouses may have acquired or maintained using a marital income. Those assets may be subject to division or can influence the distribution of other properties and debts. Gathering ownership records and possibly even working with a professional can help people with complex marital estates better understand their circumstances. Those who have a working understanding of the assets they have accumulated during marriage and the debts that are part of their marital estate are in a better position to prepare for the future.
Making sense of financial circumstances is the first step toward setting reasonable goals for property division proceedings. Rather than waiting for formal disclosure through the discovery process, spouses can prepare ahead of time, in part by collecting their own records before they file for divorce. Those who have access to key financial records are less likely to fall victim to manipulative and inappropriate financial conduct on the part of their spouse during divorce.
